This bill mandates that mortgage lenders must consider specific, borrower-authorized alternative credit data, such as rent payments, to expand access to credit for those with thin credit files.
Nikema Williams
Representative
GA-5
This bill, the "Expanding Access to Credit through Consumer-Permissioned Data Act," amends the Equal Credit Opportunity Act to require mortgage lenders to consider additional, consumer-permissioned credit information, such as rent payments, when evaluating loan applications. This aims to expand mortgage access for millions of consumers whose credit history is not fully reflected in traditional reports. Lenders must provide applicants with a notice explaining this right, and underwriting systems must be updated to process this alternative data.
Mortgage Access Expansion: New Bill Requires Lenders to Count Rent and Bank Data Toward Credit Scores.
The 'Expanding Access to Credit through Consumer-Permissioned Data Act' changes the rules for how you get a mortgage by forcing lenders to look at the full picture of your financial life, not just your traditional credit score. Under this bill, if you apply for a mortgage and feel your credit report doesn't tell the whole story, you can formally request that the lender consider 'alternative data' like your history of on-time rent payments or your consistent bank account balances. This is a major shift from the current system, where a lack of credit cards or car loans can make you 'invisible' to lenders even if you’ve never missed a rent check in a decade.
Beyond the Credit Score
This bill specifically targets the 'credit invisible'—the roughly 32 million Americans who don't have enough traditional history to generate a score. By amending the Equal Credit Opportunity Act, the bill requires lenders to give this extra data the same weight they would give a report from a major credit bureau. Think of a young professional who has lived debt-free but paid $2,000 in rent every month for five years; under Section 3, that person can now authorize their bank to share those records, and the lender is legally required to factor that consistency into their decision. It effectively turns your monthly living expenses into a tool for building home equity.
New Rights and Language Access
To make sure people actually use these new tools, the bill mandates that lenders provide a clear notice to every applicant explaining their right to submit extra info. These notices won't just be in English; the CFPB is required to provide them in the eight most common languages spoken in the U.S. to ensure non-native speakers aren't left behind. However, there is a 'trust but verify' clause: lenders can still ignore data if they can prove it is 'materially false or misleading.' This means while you have the right to share your bank statements, the lender still has the right to scrutinize them for accuracy under upcoming CFPB guidelines.
Tech Upgrades for the Modern Buyer
The bill doesn't just change the rules for the person sitting across the desk from you; it forces a massive tech update. Any organization that maintains automated underwriting systems—including federal agencies that handle single-family or multifamily loans—must update their software to handle this 'consumer-permissioned' data. This means the algorithms used by giants like Fannie Mae will have to be coded to recognize rent and utility patterns as valid risk indicators. While the CFPB has 18 months to finalize the specific rules, the long-term goal is a mortgage process that looks more like your actual life and less like a rigid math equation.